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Ninth Circuit: No personal jurisdiction over out of state eBay seller

Hansing, a resident of Wisconsin, offered a 1964 Ford Galaxie for sale on eBay. Boschetto, a California resident, was the winning bidder, and sent Hansing $34,106. He also arranged to have the car shipped from Wisconsin to California. After Boschetto found that the car didn’t meet the description in the eBay listing, he sued Hansing in California federal court, based on diversity subject matter jurisdiction. (Never mind how far below $75,000 the amount that was in controversy appears.)

Hansing moved to dismiss for lack of personal jurisdiction, and the court granted the motion. Boschetto sought review with the Ninth Circuit. On appeal, the court affirmed.

Single eBay transaction not enough

The question was whether this single transaction – enabled by eBay – constituted minimum contacts between Hansing and California to satisfy constitutional due process. A threshold question in that analysis was whether Hansing had purposely availed himself of the privileges of conducting activities in California, thereby invoking the benefits and protections of its laws.

The court answered the purposeful availment question in the negative. The single transaction did not create any ongoing obligations in California, nor did it result in substantial business being conducted by Hansing there. On this point, the court nodded to the oft-cited Burger King v. Rudzewicz case for its holding that a contract alone does not automatically establish minimum contacts in the plaintiff’s home forum. 471 U.S. at 478.

eBay as facilitator a “distraction” to the jurisdictional analysis

What makes this case worth noting (in light of the fact that personal jurisdiction cases can be pretty dull) is the court’s rejection of Boschetto’s argument that the eBay component of the deal defined the analysis. Boschetto had argued that the eBay listing would have been viewed by anyone in California, thus that functionality supported an exercise of personal jurisdiction.

But “the issue [was] not whether the court [had] personal jurisdiction over the intermediary eBay but whether it [had] personal jurisdiction over an individual who conducted business over eBay.” The court noted that in other Internet-related personal jurisdiction cases, like Cybersell, Inc. v. Cybersell, Inc., 130 F.3d 414 (9th Cir. 1997) and the famous case of Zippo Mfg. Co. v. Zippo Dot Com, 952 F.Supp. 1119 (W.D.Pa. 1997), the interactive nature of the websites had jurisdictional significance because they permitted the defendants to maintain ongoing contact with the forum.

An isolated sale on eBay, however, is different in nature. In this case, the court found that the eBay aspect was “a distraction from the core issue.” The use of eBay was to facilitate a one time contract that created no substantial connection with or ongoing obligations in the forum state.

This is not to say that the use of eBay could never give rise to personal jurisdiction outside a defendant’s home forum. A number of cases have so held. See, e.g., Dedvukaj v. Maloney. The court noted that where eBay is used as a means for establishing regular business with a remote forum, the traditional notions of fair play and substantial justice might provide for the exercise of personal jurisdiction. But this was not one of those cases.

One thought on “Ninth Circuit: No personal jurisdiction over out of state eBay seller”

Interstate commerce laws really aren't equipped to deal with how the Internet has changed things. Federal laws are still miles behind in terms of how buying a car from an eBay seller in another state should be governed. Congress needs to seriously file through all of this, because people on both sides, buyers and sellers, are being taken advantage of, or just plain confused.

Evan Brown is an attorney in Chicago helping businesses and individuals identify and manage issues dealing with technology development, copyright, trademarks, domain names, software licensing, service agreements and other matters involving the internet and new media.

Evan is a partner in the law firm of Much Shelist, P.C. He is an adjunct professor of law at Chicago-Kent College of Law, and is a Domain Name Panelist with the World Intellectual Property Organization (WIPO).